The Buy Now Pay Later industry has exploded from 2 billion dollars in 2019 to 24 billion in 2021. That’s an insane 1100 percent increase in just two years. Companies like Afterpay, Klarna, and Affirm are pushing easy credit on Americans who should know better.
These BNPL companies don’t make money when you pay on time. They rake in cash through merchant fees of up to 6 percent and late payment penalties. It’s a business model built on hoping Americans will mess up and miss payments.
The psychology behind these services is sneaky and dangerous. They rebrand debt as smart budgeting to trick people into spending more. Studies show BNPL makes people spend 30 percent more than they normally would.
Two-thirds of BNPL loans go to people with bad credit scores. These are folks who already struggle with money management. Instead of teaching financial responsibility, these companies are handing out easy credit like candy to children.
The government is getting involved through the Consumer Financial Protection Bureau. They’re worried about the risks these loans create for both borrowers and the companies themselves. More regulation means more government control over our financial choices.
Traditional credit cards at least show you a monthly statement with your debt balance. BNPL hides the true cost by breaking payments into small chunks. This tricks people into thinking they’re not really going into debt.
Hardworking Americans need to wake up to this scam. If you can’t afford to buy something outright, you probably shouldn’t be buying it at all. Our grandparents saved up for what they wanted instead of borrowing for every purchase.
This BNPL bubble is going to burst just like the housing crisis did. When it does, it will be regular Americans who pay the price while these tech companies walk away rich. Don’t fall for their tricks and stick to living within your means.
